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MIT Sloan School of Management | Office of Communications
+ THREE INSIGHTS FOR THE WEEK
January 31 – February 6, 2021
1. By multiple estimates, some 80% to 90% of data is unstructured — think text, video, audio, web server logs, and social media, among many other sources.
Unstructured data doesn’t adhere to conventional data models, making it more challenging to interpret, but it can deliver a more comprehensive and holistic understanding of the big picture.
“Since most of the world’s data, including most real-time data, is unstructured, an ability to analyze and act on it presents a big opportunity,” said Michael Shulman, a finance lecturer at MIT Sloan and head of machine learning at analytics firm Kensho.
Kensho, for example, uses natural language processing, a type of machine learning, to parse text-based finance data in earnings reports and elsewhere, increasing both the speed and scale of its data offerings. “In finance, time is money,” said Shulman. “If you can make decisions faster than your competitors, you can make money off of that.”
Retail and finance have made the most headway in capitalizing on the benefits of unstructured data thus far, said Althea Davis, a data executive at smart cities consultancy NXN in Abu Dhabi. Now other industries, including shipping, transportation, legal, and real estate, are catching up.
2. Most executives worldwide are out of touch with what it takes to lead effectively in the digital economy, according to a new study from MIT Sloan Management Review and Cognizant.
The report, “Leadership’s Digital Transformation: Leading Purposefully in an Era of Context Collapse,” is based on a global survey of more than 4,200 managers and executives in over 20 industries. Some 72% of respondents strongly agreed that it is very important that they work for an organization with a purpose they believe in, but a mere 25% strongly agreed that their organizations are as purpose-driven as their leaders believe them to be.
The report — which features interviews with C-suite leaders from Starbucks, Anheuser-Busch InBev, Delta Air Lines, Best Buy, and Purdue University — reveals that workers expect digital transformation to better reflect and respect their concerns, such as purpose and inclusion, not just ensure superior business capabilities, better compensation, or greater flexibility.
In the current environment, the study concludes, leaders must pay close attention to how their leadership is experienced and consider whether digital tools, techniques, and technologies are making their companies’ key stakeholders feel more valued.
3. How did small business owners spend — and not spend — their own money in the early days of COVID-19? A new study could guide policymakers in drafting additional rescue measures as the pandemic persists, said Antoinette Schoar, one of the report’s co-authors and a professor at MIT Sloan.
To conduct their study, researchers created a dataset using anonymous JPMorgan Chase credit card and debit card transaction information between January 2019 and May 2020 from 380,532 small businesses and their respective owners.
The authors — Schoar, MIT Sloan professor Jonathan Parker, and PhD candidate Olivia Kim — found that small business revenue and business owners’ personal consumption both dropped around 40% in March 2020 compared to a year earlier.
Even owners whose businesses didn’t suffer significant revenue downturns still cut back their personal spending. “It really was a national shock that affected everyone,” Schoar said.
Going forward, she said, the research suggests that small businesses would benefit from a stronger national response, as opposed to uncoordinated regional and state intervention.